1985 (7) TMI 318 - HC - Companies Law

Summary

Issues:
1. Impact of moratorium under Banking Regulation Act on authorized foreign exchange dealings.
2. Violation of fundamental rights under Article 26(d) of the Constitution.

Analysis:

Issue 1:
The judgment dealt with the impact of a moratorium imposed under the Banking Regulation Act on authorized foreign exchange dealings. The petitioners, who received foreign contributions through branches of a bank under moratorium, contended that the moratorium should not affect the authorization granted to the bank for dealing in foreign exchange under the Foreign Exchange Regulation Act. The court examined the statutory provisions of both Acts and concluded that the moratorium suspended all activities of the banking company, not just limited to banking transactions. The court held that during a moratorium, the bank cannot transact any business, including foreign exchange dealings, as its activities are suspended. The contention that the bank's status as an authorized dealer in foreign exchange exempted it from the moratorium was rejected. The judgment emphasized that the bank's activities were halted during the moratorium, including foreign exchange transactions, irrespective of additional authorizations required under other laws.

Issue 2:
Regarding the alleged violation of fundamental rights under Article 26(d) of the Constitution, the court examined the right of religious denominations to administer their properties according to law. The petitioners argued that the moratorium infringed upon this right. However, the court clarified that the right to administer properties is subject to laws governing public order, morality, and health. The judgment highlighted that the law referred to in Article 26(d) could be challenged on various grounds, not limited to public order, morality, and health. The court dismissed the argument that challenges to laws affecting religious denominations should be restricted to specific grounds. Ultimately, the court ruled that the petitioners' claims did not raise any substantial legal questions of general importance warranting an appeal to the Supreme Court, and the original petitions were dismissed.

In conclusion, the judgment clarified the scope of a moratorium under the Banking Regulation Act, emphasizing its suspension of all banking activities, including authorized foreign exchange dealings. Additionally, the court elucidated the limitations on the right of religious denominations to administer properties under Article 26(d) of the Constitution, underscoring that such rights are subject to laws beyond public order, morality, and health.